Japanese firms very interested in Thailand's key sectors

Masayasu Hosumi: Thailand now ranks second for Japanese investment after China.

Many Japanese small and medium-sized enterprises have shown a strong interest in doing business in Thailand, in particular in the service and industrial-support sector, according to the president of the Japan External Trade Organisation (Jetro) office in Bangkok.

In an exclusive interview with The Nation, Masayasu Hosumi said many SMEs had asked for advice about doing business in the Kingdom.

"Many SMEs from Japan would like to expand their business into Thailand because of its emerging growth economy, and Thailand, and especially Bangkok, can provide a very attractive market to serve Japanese SMEs' growth," he said.

Confidence in Thailand among Japanese investors should also increase in the next survey results, which are scheduled to be released next month, with positive sentiment expected to rise now that the country has a functioning government, and one which has already come out with economic-stimulus policies, he said.

Thailand's economy will be stepping beyond the middle-income level to an average of more than US$5,000 (S$6,500) a year per person in the near future, and Thais will therefore have more purchasing power, which will in turn serve Japanese business expansion, Hosumi added.

The main types of business that Japanese SMEs will expand in Thailand are in industrial-support services such as logistics, consultancy and accounting, and other services.

Moreover, the Jetro Bangkok chief said Japanese investors were also eyeing wider expansion in ASEAN under upcoming regional economic integration.

According to data from Japan's Finance Ministry, Thailand, Indonesia and Vietnam rank second, third and fourth, respectively, as target countries for Japanese investment, after China.

ASEAN this year has become the major target for Japanese investment, replacing China.

Data shows the value of Japanese direct investment in ASEAN came in at 303.1 billion baht (S$12 billion) during the first seven months of the year, against a total of 690.44 billion baht for the whole of last year.

Direct investment in China was worth 103.86 billion baht from January to July, against 266.27 billion baht last year.

Despite their interest in Thailand, there are some problems Japanese investors have expressed concern about in the latest survey and want the Thai government to address, such as pressing ahead with infrastructure projects and solving traffic problems in Bangkok.

Asked if Japanese investors were interested in joining development of Dawei in Myanmar, he said his government was looking at that.

He could not predict if Thai shipments to Japan would be negatively affected by the Japanese government's policy to increase consumption tax next year, as a final decision on whether to raise the tariff to 10 per cent would not be made until December.